Align needs of utilities & energy customers to tackle extreme weather events
With increased demand for electricity colliding with the onslaught of severe weather events across the country, America’s utilities must plan ahead to avoid rolling blackouts, higher bills for low-income customers, and a lack of overall engagement with their energy customers.
“The sobering reality is that extreme weather is forcing utility interests and energy customer interests to align. As extreme weather affects more people more often and, in more ways, the results are all-too-often power outages or other interruptions to their energy needs,” says Rachel Henderson, senior product marketing manager at Uplight, an energy technology company. “This increased volatility — on both the supply and the demand side of energy — makes the need for grid resiliency, affordability, and safety, which have always been priorities for utilities, now front and center for energy customers, as well.”
Henderson recently shared advice with Daily Energy Insider about how utilities can prep their customers and the grid for extreme weather.
The following excerpt has been edited for length and clarity.
Q: How can utilities align with customer interests and needs to address extreme weather challenges?
A: Utilities need to find new ways to appeal to customers about their changing business model. While there is variation across customer class, geographic region, and other demographics, most customers want to know how much money they owe the utility and to make sure their power stays on.
Utilities are going to need to appeal to customers in a variety of new ways to answer the customer question of, “Why should I care or do something differently?”
For example, not every customer is going to be a good fit to participate in a traditional peak load shaving utility demand response (DR) program. However, utilities that can offer a variety of program offerings — like automated Time of Use optimization and/or DR program participation — will be more likely to have better customer participation and deliver better load flexibility outcomes with customer-cited resources.
Q: How should utilities plan ahead to avoid rolling blackouts or grid interruptions caused by severe weather?
A: Utilities are already investing billions of dollars in the areas of generation, transmission, and distribution to increase reliability and resiliency for the grid overall. These are big, necessary upgrades to the supply side of the equation.
As we work to simultaneously decarbonize the grid to increase its reliability, often lost in this equation is the importance of grid-edge solutions and devices, the actions of energy customers themselves, and the intelligent software that connects it all together.
Being able tap into this level of flexible load goes a long way towards keeping the lights on (literally) or keeping your house cool during a heat wave when the grid is stressed during extreme events.
This critical, flexible capacity needs to be built now, over time, with energy customers, since their awareness, engagement, and participation is the key to unlocking its potential. DR programs shave peak load for utilities on high-demand days, like during a heat wave. Ongoing, real-time orchestration and optimization programs unlock even more potential for grid-edge flexibility.
Today, however, those programs aren’t deployed widely enough, or across enough distributed energy resource (DER) types.
For instance, utilities have the biggest opportunity since the grid’s creation 100 years ago to positively engage their customers. Take electric vehicles (EVs) for example. They have huge potential to be an asset to the grid, so as we increase penetration from around 2 percent today to 50 percent of vehicle production by 2030, connecting these as DERs transforms them from grid strains to grid resources.
Our research found that energy customers trust utilities the most when it comes to helping them manage their energy decisions, but have a rather low inclination to actually engage with them. So the opportunity is to connect the natural, outsized affinity Americans have for their cars to the trust they have in their utility in order to unlock the potential for EVs, and other DERs, to play this key role in shoring up the grid.
How to make this connection? Create programs that meet energy customers where they are and provide compelling, simple, and frictionless enrollment opportunities. For example, invite a recent purchaser of an EV to understand and explore electric rate options, purchase a level 2 charger, enjoy bundled rebates and program savings, and schedule the installation of that charger in their garage, all in the same seamless transaction.
As the trusted advisor, utilities play a key role here, and that foresight and planning needs to be happening now.
Q: How can utilities help customers plan for and pay higher bills caused by such impacts, especially low-income customers?
A: For low-income customers, something as simple as a mid-cycle alert based on their current usage patterns can go a long way to help them better plan their usage for the rest of the month.
We’ve also piloted a program with Duke Energy that offers a fixed bill, with no true-up for customers if they enroll in an automated device management program. In addition to having a more predictable energy bill, we’ve found that these households are also using lower energy overall.
Time of Use rates and other flexible rate programs are evolving rapidly and have the potential to help many customers save on their bills. The challenge is that, unlike the price of a gallon of gas, for example, most customers don’t know their current rate, much less how it’s structured or calculated.
The key here is to educate energy customers that there are a variety of energy use choices that can help them save money, and help the grid at the same time.
In fact, with Earth Day around the corner (April 22), now is a great time for utilities… to preload territories with DERs, like smart thermostats, to plan ahead for occasions like extreme weather that are inevitable during the summer months. In fact, we sell three times the number of smart thermostats in April as we do in the prior or subsequent month.
Q: What are a few best practices utilities could utilize to improve their energy capacity resources?
A: Utilities have an opportunity to utilize customer-cited, behind-the-meter DERs for a variety of load flexibility outcomes, including as an energy capacity resource.
To achieve this, the overarching theme is to become more customer-centric in service of a more sustainable and resilient grid.
At a practical level, this means creating a best-in-class customer experience across four key areas:
- Create a seamless customer enrollment experience
- Proactively communicate with customers
- Incorporate personalization
- Enable customer choice
Each of these has many components, but at the end of the day, it’s putting the customer much more at the center of the decisions a utility is making, and continually raising the bar, looking to best practices from both in and out of the industry for opportunities for innovation and to delight energy customers.
Customers do not have an obligation to allow the utility to access their behind-the-meter DER — meaning that utilities need to show clear value propositions to customers as to why their participation matters for the grid.
Q: Anything else you’d like to add?
A: If we do the work now to engage energy customers and align both interests and actions, when that next extreme event happens, a utility will have thousands of resources, allies, and advocates to help keep the lights on for their customers and make them a more engaged part of the process.